Libyan bulldozers began knocking down the green walls surrounding Muammar Gaddafi's main Tripoli compound, known as Bab al-Aziziya, on Sunday as the new leaders said it was time "to tear down this symbol of tyranny".

The sprawling, fortress-like compound has long been hated by Libyans who feared to even walk nearby during Gaddafi's more than four decades in power and its capture was seen as a turning point in the civil war as revolutionaries overran the capital in late August.

Ahmad Ghargory, commander of a revolutionary brigade, said the area would be turned into a public park.

"It's the revolutionary decision to tear down this symbol of tyranny," Ghargory said. "We were busy with the war, but now we have the space to do this."

Already, Libyans have turned the courtyard in front of Gaddafi's former house, which he used for many fiery speeches trying to rally supporters during the uprising, into a weekly pet market. Tripoli residents roam the premises as if at a museum, with vendors selling revolutionary flags and other souvenirs.

The Bab al-Aziziya compound had been a mystery to most Libyans. Though it is one of the city's largest landmarks, no streets signs indicate where it is. Few ever entered, and many Tripoli residents said they wouldn't even walk nearby, fearing security guards on the compound's high green walls would get suspicious and arrest or shoot them.

"I was never able to enter this building or even pass by these walls before. We won't have any more walls in our lives," Ghargory said.

The compound was one of the main targets for Nato air strikes during the months leading to Gadhafi's ousting.

Libyan fighters overran the area on 23 August during fierce fighting for the capital, jubilantly rampaging through the remnants of barracks, personal living quarters and offices seen as the most defining symbol of Gaddafi's rule.

Gaddafi's residence, now gutted and covered with graffiti, was also targeted in a US bombing raid in April 1986, after Washington held Libya responsible for a blast at a Berlin disco that killed two American servicemen. A sculpture of a clenched fist crushing a US fighter jet that had been erected after the strike has been removed.

Gaddafi entertained guests in a Bedouin-style tent pitched near two tennis courts about 200 yards from the family home.

"All the bad things that happened, happened inside these walls. And he kept his mercenaries and tortured people inside these walls," said Tarek Saleh, a 25-year-old revolutionary. "Before we were never able to enter this site, and we're tearing these walls down so we don't have to remember those dark days."

Libyans are eager to move on after decades of repression, even though fighting continues on two fronts and tensions between supporters of the former regime and revolutionary forces remain high – even in Tripoli.

Revolutionary forces have squeezed Gaddafi loyalists into one main district in his hometown of Sirte after weeks of fighting, but some said fears of friendly fire as well as a lack of coordination and communications were slowing their advance. Fighters from the eastern city of Benghazi and Misrata to the west were trying to reorganise to solve that problem.

"We have them cornered in a 900 by 700 metre area, but the fighting is difficult because we are worried about firing on our own forces, they are mixed together," Benghazi field commander Khaled al-Magrabi said.

Commanders said they have agreed to divide the remaining loyalist area between them to prevent confusion.

Libyan fighters also faced discord over the looting of buildings, including the airport and houses in Sirte, on the coast 250 miles south east of Tripoli.

Associated Press Television News reporters saw trucks carting off tractors, industrial generators and heavy machinery on the road from Sirte to nearby Misrata, which was under siege by pro-Gaddafi forces for months and saw some of the fiercest fighting of the war.

Smaller pickups were loaded with rugs, freezers, refrigerators, furniture and other household goods, apparently taken by civilians and fighters to be used in their homes or resold.

The looting was an indication that reconciliation and unity may be difficult to achieve in post-Gaddafi Libya.

Commanders tried to rein in looting by ordering fighters to refrain from entering private homes and to detain anybody not authorised to be in the area. Benghazi fighters arrested three men for looting on Saturday.

Revolutionary forces also distributed leaflets at checkpoints leading into the city that read, "Dear Muslims, avoid God's wrath. Do not steal from people's homes, their cars, or take their personal possessions."

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